Rental Property Investor · San Francisco, CA · Member since 2016 · 7 posts · 0 votes
Hi,
I should first say that I am brand to real estate investing but I am ready to get started. I am particularly interested in buy and hold and rehab out of state (I live in San Francisco). Anyone doing this that would be willing to share how to get started or even maybe willing to partner up? Thank you for your help!
I'm actually from California and thought of out of state investing in Cleveland but actually MOVED to Cleveland to get a feel for the neighborhoods in real life. It's been a week here and I like it! Quite different than California but it's great to EXPERIENCE what I'm investing in...in real life. I'm house hacking a duplex right now. It's completely different to bid on pictures vs. seeing it in real life. If you have any questions PM me would love to connect with other investors in Cleveland!
I'm from Los Angeles (another high priced area) and have managed to stay in state with limited capital. Keep in mind all the costs to just go see your property out of state (flight, hotel, rental car, time off work, etc.). I am of the mindset that I would rather be able to drive two hours or so to my property rather than have to go through all the hassle (and cost) of going out of state. There are areas in CA with similar returns as out of state. Would love to connect with you!
I am from Los Angeles as well and have found some deals here. It does take a little more capital to get started as the deals seem to start at higher prices than some out of state locations. I am interested in looking out of state in the near by states (Nevada and Arizona) as they are still drivable, minimizing travel costs but lower priced than many of the areas of Southern California. Would be interested to see what others have to say about of state investing.
I have clients in Los Angeles and Denver that flip here in Phoenix. I help them find, buy and retail the properties. I also run production on the rehabs as their project manager analyzing the market for the ARV, calculating the budget, designing the remodel, hiring the trades, photographing, staging and listing it on the MLS to sell. It works out very well for them!
Welcome to BP. You are right place for everything RE. I am live north of SF and even here the prices are outrages to get any cash flow. Hence I ventured out of state, I recently closed on 2 Duplexes in the Cleveland Suburbs. Even though I haven't seen any $$ coming in yet but within a month or so it will change.
According to my analysis I should average between 9%-12% returns on CoC.
I'd be happy you share my entire experience in detail if you are interested.
Welcome to BP @Michael Sarkissian ! I'm not sure if you listen to the BP podcasts but I started listening to them these past couple months and one of the episodes I came by recently was on investing out of state. It was podcast episode 73 : Investing In Rental Properties When Your Local Area is Too Expensive With Mehran Kamari. He was also on show 25 featured for having his first deal, fast forward to show 73 where he closed around 10 deals I believe. It has a lot of good information on investing out of state if you haven't heard it already check it out! Best of luck to you!
Hello Michael Sarkissian and welcome.
I'm in the same boat as you I have also considered looking out of state for property. I'm also considering working with a partner maybe we came work something out.
Thank you all of you for the responses and advice. It's great to see what others are thinking and doing. Thank you @Mason Marin in will definitely listen to that podcast.
Chicago is in a bubble, junk is expensive, bidding wars for bull crap is the norm I recently "won" a bidding war and didn't even get into the property. Madness, I tell you.
I'm actually from California and thought of out of state investing in Cleveland but actually MOVED to Cleveland to get a feel for the neighborhoods in real life. It's been a week here and I like it! Quite different than California but it's great to EXPERIENCE what I'm investing in...in real life. I'm house hacking a duplex right now. It's completely different to bid on pictures vs. seeing it in real life. If you have any questions PM me would love to connect with other investors in Cleveland!
I'm actually from California and thought of out of state investing in Cleveland but actually MOVED to Cleveland to get a feel for the neighborhoods in real life. It's been a week here and I like it! Quite different than California but it's great to EXPERIENCE what I'm investing in...in real life. I'm house hacking a duplex right now. It's completely different to bid on pictures vs. seeing it in real life. If you have any questions PM me would love to connect with other investors in Cleveland!
Very interesting story Andrew.
Can you tell us some of the differences you noticed living in Cleveland vs living in California?
@Jose Zepeda i am from BayArea and consider out of state investment too. Interested as well in partnership idea that you mentioned and i was wondering where specifically do you want to invest ?
@Andrew A. u made a big commitment moved to the area and physically do your due diligence. I would love to connect and get some feedback from house hacking. Goodluck brother !
@Andrew A. I did something similar although I did it by begging for military orders here. We've been here in Cleveland for two weeks now. In addition to REI I have a professional motivation to be here.
Differences: The value of the dollar goes a lot farther here. People get paid less for the same job here, but they can stretch it farther. The housing is a lot different, a B class neighborhood here might look like a C or even D class neighborhood to someone moving from Seattle or the bay (I've lived in both) but the neighborhood definitely has A and B class people living in it. Those are just my first two quick thoughts.
@Andrew A. I did something similar although I did it by begging for military orders here. We've been here in Cleveland for two weeks now. In addition to REI I have a professional motivation to be here.
Differences: The value of the dollar goes a lot farther here. People get paid less for the same job here, but they can stretch it farther. The housing is a lot different, a B class neighborhood here might look like a C or even D class neighborhood to someone moving from Seattle or the bay (I've lived in both) but the neighborhood definitely has A and B class people living in it. Those are just my first two quick thoughts.
Great input Andrew, welcome to Cleveland. You'll find that Northeast Ohio has a lot to offer.
One thing to point out on the difference in neighborhood class is the age of neighborhoods. Cleveland is an old city and you'll definitely notice that by looking at home ages. Many C grade neighborhoods here are filled with homes built in the beginning of last century. even B grade neighborhoods like western Lakewood will have homes and multifamily dwellings built during that same period, but much of that area has been well-kept and now provides a nice classic décor and look.
As you stretch out further in the suburbs, you'll be able to find B grade properties built in the 50s and 60s, and further out in A grade cities like Avon Lake, Strongsville, and Westlake you'll find new builds and homes over 4,000 sq. ft. that have been built after 1995. The good/safe investments fall in the B grade neighborhoods, the lower grades have lower class tenants and the new builds will never rent for amounts that cover your expenses, unless you're Airbnb'ed them for the Republican National Convention, then that's a different story :)
Enjoy exploring the new city! Feel free to reach out to talk more about the area and the investment opportunities here.
I'm actually from California and thought of out of state investing in Cleveland but actually MOVED to Cleveland to get a feel for the neighborhoods in real life. It's been a week here and I like it! Quite different than California but it's great to EXPERIENCE what I'm investing in...in real life. I'm house hacking a duplex right now. It's completely different to bid on pictures vs. seeing it in real life. If you have any questions PM me would love to connect with other investors in Cleveland!
Andrew, welcome to Cleveland! Our city is really seeing a revival in local culture and pride. And the environment is prime for real estate investors.
What area/neighborhoods are you looking in for your real estate investing?
Thanks everyone for responding to my comment. Many of you asked for my thoughts so I decided to write a little mini post sharing my thoughts and experiences thus far in Cleveland.
I'll try to say it like it actually is as an investor newbie from California trying to make it happen in Cleveland. Keep in mind I've been here for 1 week and lived in 3 continents in my lifetime and I keep it real.
Demographic
As an Asian American in Cleveland (or anywhere in the midwest outside of Chicago I assume), it is very normal to be the only Asian guy/gal in the neighborhood. In Brooklyn/Parma/Lakewood where most of you guys will be looking at to invest, there's not a lot of diversity (outside of African American and Caucasian) although I've noticed that there is sizable Puerto Rican community here. Being the only Asian on the block doesn't bother me at all and I'm having no problem meeting the nicest people. They are all willing to chat it up and talk to newcomers. Very warm and welcoming.
Block by Block
It appears that neighborhoods can't be broadly painted with one stroke. For example, Old Brooklyn can be divided into subsections that range from Tier B+ like neighborhood to Tier C-. South Hill in Old Brooklyn is really nice! You might see the polo shirt and dog walkers. Some areas near the zoo not so much; you might see the some riff-raffs on the street. When I did my first gut-rehab in Baltimore, I house-hacked in this type of area so I'm a bit desensitized to it.
Networking
I was fortunate enough to connect with a real estate agent who was very connected with rehabs and had a handful of connections to help with fixing up a place to get it rent ready, roofers, the whole 9 yards. In Cleveland I feel it's so much more about knowing the right people and making good connections as the processes here are less formal and structured (compared to SF/LA/SD). For me, I wasn't looking for the suit and tie real estate agent but more so, an agent that understood my mission and isn't afraid to pull up some carpet to expose that good wood. It's important to be on the same wavelength.
Timing and Good Deals
Everything starts with a good deal. If you didn't start with a good deal to begin with there's no profit to be won. I bought a duplex and an SFR (within 2 months span) and I truly got lucky with these in terms of pricing and timing. The duplex I bought is 5000 sq/ft total glazed brick beauty. I got it foreclosed and won the bid war although someone bid over. Cash Offer and price point was key. The SFR was because I got a verbal agreement right when it came on the market. Literally I refreshed the page and analyzed it and made the offer from San Diego to Cleveland. Timing from my experience so far has been so crucial. Sure you may get a great discount on something that has been on the market for 300 days that nobody wanted. But you can also get incredible deals at .00003 days.
Never Visited the Properties Prior to Putting in An Offer
So as mentioned, I bought both properties (duplex and SFR) just from pictures from California. I was planning to move to Cleveland anyways to invest but those deals were really good. I had obnoxious party neighbors in San Diego that would be noisy til 3AM so I was eager to move out, but I was also chasing this dream to invest in Real Estate. As most of you know, California real estate is ridiculous. If your current situation (noisy apartment causing unnecessary stress)/environment (unaffordable housing market) is not good, the only thing you can control is yourself. Moving to Cleveland to embark on this real estate adventure while most may think is insanity, was very natural for me and I am learning so much here. Especially about boilers that we Californians would never be exposed to. There's so much charm in some of these homes and neighborhoods that pictures just can't show. Now do I plan to call Cleveland my forever home? Who knows, but I'm all about the process of learning and DOING instead of wishing and stagnating.
Hope this was helpful albeit a bit long.
Thanks for all your comments.
Andrew
p.s. I'm not going to re-read and correct all typos on this post because I'm busy fixing up my properties! Excuse the poorly written post. Focus on the content. PM me if you'd like to connect!
I should first say that I am brand to real estate investing but I am ready to get started. I am particularly interested in buy and hold and rehab out of state (I live in San Francisco). Anyone doing this that would be willing to share how to get started or even maybe willing to partner up? Thank you for your help!
